Pakistan Government Proposes New Pay Scales, Salary and Allowance Increases in FY2026-27 Budget

The federal government has proposed a wide-ranging salary and benefits package for public sector employees, armed forces personnel, and pensioners in the Fiscal Year 2026-27 budget, including the introduction of revised pay scales and increases in several allowances.

According to a senior official from the Ministry of Finance, the government is considering the implementation of new Pay Scales 2026, under which the Adhoc Relief Allowance 2022 and Adhoc Relief Allowance 2025 may be merged into the basic pay of employees, subject to specified conditions. The proposed measures are recommended to take effect from July 1, 2026.

The budget also recommends a 7 percent Adhoc Relief Allowance on the existing basic pay of all federal government employees.

Sources said that the government plans to continue the Disparity Reduction Allowance (DRA) 2026 at 15 percent of basic pay for employees already receiving the benefit. In addition, a 50 percent increase in the existing conveyance allowance has been proposed.

For personnel of Civil Armed Forces, the Constant Attendant Allowance is proposed to be increased from Rs7,000 to Rs30,000 per month.

The government has also recommended introducing a Special Area Compensatory Allowance (SACA) for personnel of the Pakistan Coast Guards, equivalent to 10 percent of the 2015 basic pay scale, while discontinuing the 40 percent allowance that has remained frozen since 1994.

Employees of the Immigration and Passports Department may receive an IMPAS Allowance equal to 100 percent of their basic pay as of June 30, 2026, subject to prescribed conditions. The budget also proposes calculating Executive Allowance according to the 2022 pay scales.

For officers and staff of the Cabinet and Cabinet Committees Wings under the Cabinet Division, Special Pay is proposed to increase from Rs6,000 to Rs20,000 per month.

The budget further recommends a Special Allowance equal to 150 percent of the basic pay as of June 30, 2025, for employees of the National Counter Terrorism Authority (NACTA) and the National Integrated Financial and Threat Assessment Centre (NIFTAC). Under the proposal, the existing 100 percent Risk Allowance would be abolished and Executive Allowance discontinued.

Similarly, officers of the Police Service of Pakistan (PSP) serving in the Frontier Constabulary are proposed to receive a temporary allowance equal to 150 percent of their basic pay as of June 30, 2025. In exchange, the existing FC Allowance would be withdrawn until a comprehensive review of salaries and allowances for all Civil Armed Forces is completed.

For employees of the National Highways and Motorway Police from Grade 1 to Grade 22, the current Special Allowance is proposed to increase from 10 percent to 50 percent of the basic pay as of June 30, 2025. The allowance would remain frozen at that level.

The budget also proposes a Special National Police Academy (NPA) Allowance equal to 50 percent of the basic pay as of June 30, 2025, for officers posted at the academy. Additionally, the Special Conveyance Allowance is recommended to increase from Rs6,000 to Rs10,000 per month.

The government has also proposed relief measures for pensioners, although detailed provisions are expected to be announced separately.